Sberbank’s mortgage loans increase 1.5 times for six months

Sberbank's CEO German Gref said that this year they observe revival of demand on mortgage loans

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NOVO-OGAREVO, August 5 (Itar-Tass) - The number of mortgage loans issued by Sberbank have increased one and a half times for six months, the bank’s Chief Executive Officer, German Gref, briefed President Vladimir Putin on Monday.

“Our mortgage portfolio has reached 1.070 trillion rubles and we issue practically one in two mortgage loans in our country,” he said. “Over the past six months we have disbursed by one and a half times more mortgage loans than in 2012. Our share on the markets has already made up 49%, which let’s say is rather high.”

“This year we observe revival of demand on mortgage loans,” Gref said adding that last year approximately 25-30% of apartments were bought with mortgage loans, while in 2013 this figure has already exceeded 45%, i.e. one in two flats in Russia is bought with mortgage loans.

“Of course, we hope if the inflation rate goes down and the liquidity situation remains normal, may be, it will be possible to slightly cut mortgage rates until the end of the year, first of all for such categories as young families,” Gref said recalling that beginning from the second quarter of the year deposit rates have been decreasing. Moreover, since March Sberbank has already reduced loan interest rates to individuals and legal entities twice.

Gref also said the bank had signed agreements with approximately 60% of Russian regions under which teachers, medical workers and young specialists receive regional subsidies. “We maximally reduce interest rates for them,” he said.

“Moreover, we use annuity payments or payments that change depending on how a person’s incomes grow,” Gref said. “At first, an initial interest rate is lower for young people and in two-three years it grows. Naturally, we hope that their incomes will grow.”

“Today, the average mortgage term is 15 years, while the average repayment period is approximately 7.5 years, as people pay off their mortgage loans two times faster, of course, over high interest rates,” he added.